Property & Casualty Insurance: Managing Auto Exposure
A for profit premier auto parts distributor with operations throughout the tri-state was at increased risk for auto exposures because of their large fleet of vehicle.
Following a territorial expansion, the client significantly increased the number of vehicles in its fleet, which resulted in a corresponding increase in base premium of their property and casualty insurance. However, disproportionately large and more frequent automobile losses, due to a swell of new drivers, resulted in per-vehicle losses increasing by over 125%. Unsurprisingly, property and casualty insurance premium rose by over 10% the following year; a six figure increase.
In an effort to drive down property and casualty insurance cost, Exude’s Risk Management team focused on reducing excessive automobile losses; first, by identifying and removing high risk individuals from its driver pool, then, by improving the remaining drivers’ habits. The second risk management technique was achieved by investing a portion of the savings realized through renegotiating the previous broker’s insurance program into a comprehensive fleet telematics system. This, in combination with implementing a systematic monitoring and disciplinary program was the risk management strategy used to improve property and casualty insurance premiums and address the high auto claims.
In the year following the risk management techniques implementation, the client was able to halve its automobile losses and reduce average automobile claim value by 68%. As of 2017, and since partnering with Exude, the client’s property and casualty auto premium is down over 20%, despite nominal increases in number of vehicles (insurance premium per vehicle fell by 25% over the same period).